When the trend breaks

I want to teach you some of my long term market insights. You have probably read books and media publishments on when to sell your stocks as a long term investor.

The other day I read you should sit on stocks all of the time and never take profits. I have to say I like this strategy but what about major market corrections and when we get a market situation like we had under the financial crisis.

Most investors have their own opinions about when to take profits. This time around I will tell you some of my market philosophy. Sometimes you feel others have more successful strategies than your own. I can mention the legend Warren Buffett and the way he plans and makes investments.

Here you can see the ten year chart of the tecnology index Nasdaq. What is apparent is the long term positive trend. The market up since the bottom of the crisis in March 2009. What can we use this simple long term chart for.

Trend following popular these days. Market trend followers have cashed in the last nine years. What can we learn from them.

My proposal is to sell your stocks when the long term trend breaks. If you bought your stocks in 2012 you would have done wise to sit all of the time till now. This if you are a long term investor.

Myself I have always tried to time short and medium term corrections. This is a strategy more for investors with trading capabilities. If you are clever at timing short term corrections you should of course continue investing more short and medium term.

To sell your stocks as the long term trend breaks more of a long term strategy. Further I have to say I would add the use of diversified portfolios to this investment strategy.

Hope you found the strategy of selling as the market trend breaks helpful.